COLOGNE, Germany – In a ruling that could prove a landmark case for online copyright protection, a Hamburg court on Friday ruled in favor of rights collection agency GEMA in its long-running case against YouTube.

The court ruled, in the first instance, that YouTube must remove several copyright protected music titles from its German site and tighten its screening process to better locate and delete protected works in future.

The ruling is a victory for GEMA, which wants to force YouTube to pay more to compensate German rights holders for videos streamed on its site. GEMA, whose members include rights holders in the music, film and TV industries in Germany, would like YouTube to enter in a deal similar by which YouTube compensate rights holders either via an annual lump sum of around 10.25 per cent of YouTube's net advertising revenue in the territory or by paying around 0.8 cents per title streamed. Music streaming service Spotify agreed to similar terms with GEMA to get access to the German market earlier this year but YouTube rejects this as a money-losing model.

However, following the ruling, which is not yet legally binding, YouTube spokesperson Kay Oberbeck said the Google subsidiary was willing to negotiate with GEMA to find “a way for the artists to also profit from their work.”

YouTube has revenue-sharing deals in place in several European countries but Germany has been a holdout, with GEMA demanding YouTube pay more or remove protected works from their site altogether.

In a key aspect of the ruling, the court found that YouTube shared some responsible for the distribution of copyright-protected videos on its site. It ordered the site to step-up its screening process for pirated works by adding keyword filters to detect illegal titles. Currently, YouTube uses Content-ID software, which screens videos for a digital fingerprint specific to protected works. If a match is found, the video is removed. But the German court said the Content-ID system was not sufficient because it did not detect other copyright violations, such as karaoke versions of protected songs or illegally-shot concert footage.

If YouTube does take down flagged videos, it could face a fine of up to $328,000 (€250,000) or a six-month prison sentence per instance.

YouTube can appeal the ruling to the Hamburg Supreme Court.

The court’s decision Friday set off a storm of online protest among many enraged German Internet users and music fans.

“GEMA managed to get its way against YouTube, the artists, consumers, the free Interent and its own members. Congratulations!” read one disgruntled tweet. While Germany’s Pirate Party Tweeted that the ruling “would help neither art nor the artists."